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Ruling to open up Pinnacol books, give peek at execs’ fancy golf junket

A Denver District Court judge ruled Thursday that Pinnacol Assurance is a quasi-governmental agency that is subject to the Colorado Open Records Act.

The ruling came as a result of a lawsuit between KMGH television in Denver and the state-started Pinnacol, which provides workers’ compensation insurance to nearly 60 percent of the state’s businesses and about 1.5 million workers.

Earlier this year, the TV station aired a story showing several Pinnacol staff and board members, who are appointed by the governor, spent “tens of thousands of dollars” on a trip to a golf resort in Pebble Beach, Calif. The station filed a Colorado Open Records Act request to get more information about that trip, but Pinnacol sued to stop it.

Instead, Denver District Judge Morris Hoffman ruled against the insurer.

“This is the right decision under the law,” said Sen. Morgan Carroll, D-Aurora, who headed a legislative panel last year looking into the insurance company. “If we learned anything over the past year, it is that Pinnacol needs to answer to injured workers, to the businesses it serves and to taxpayers about how it does business, just like any government agency.”

In a statement, the company said it was reviewing its options to see if it will file an appeal. It has 30 days to file an appeal or provide the records.

Still, the company said it shouldn’t have to turn them over.

“Pinnacol believed this request was improper under Colorado law because it involved disclosing records that do not relate to any public function, and do not involve the expenditure of public funds,” the company said. “The request, in our view, improperly sought records that could harm Pinnacol’s competitive position and involve an improper intrusion into the privacy of individuals who attended the event.”

By law, the quasi-governmental company pays no state taxes and is part of the state’s public-employee-retirement system. It came under legislative scrutiny last year when lawmakers learned Pinnacol had about $733 million in surplus funds, far more than they thought necessary to pay claims. Lawmakers questioned whether the company was overcharging premiums to businesses while underpaying claims to workers.

A state audit in June said Pinnacol collected about $399 million in premiums in 2009 and paid out $256 million in claims.

The audit said Pinnacol sets annual financial targets below a prior year’s actual performance that ensure executives receive maximum bonuses, which can be as high as 52.5 percent of an executive’s annual salary.

It paid more than $1.9 million in bonuses in 2007 through 2009, the audit said.